Tuesday, August 02, 2016

The Grand Illusion, $80,000 Gold 
& A Worldwide Nightmare
"Welcome to the wonderful world of illusions. This is a world where few people can see the difference between reality and fantasy. And maybe there is no difference. Just looking at the U.S. election and the candidates, it seems like total fantasy from this side of the Atlantic. It is difficult to take the whole election process seriously. But this is the world we live in today. Having in the last week seen people in many European countries run around the countryside and cities chasing Pokémon Monsters, you wonder if the presidential candidates might also be part of the same game .. It seems like markets are also an illusion. How else can the Dow be 63% above the 2000 high whilst the Euro Dow 50 stocks are down 45% in the same period and with Emerging Markets down 36%, Brazil and Hong Kong down 35%, Nikkei down 25% and Shanghai down 49% all since 2014-15. We live in a totally interconnected global economy but there just seems to be more skilled illusionists in the US who can defy reality. With corporate profits declining fast, with current account and budget deficits for half a century, with 95 million people not in the workforce, almost 50 million on food stamps, with Q2 GDP at 1.2% (if real inflation rate was applied GDP would be negative) and with exponentially growing debts of over $200 trillion (incl. unfunded liabilities), you wonder what U.S. investors are smoking."
- Egon von Greyerz
LINK HERE to the article

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